sebi:WTMO/02/CFD/06/2005

SEBI · SEBI · 2004-08-04 · Madhukar, Whole Time Member

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Facts / Headnote

Exemption granted from complying with Regulation 11 of Chapter III of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, subject to conditions, for the proposed acquisition of 20,00,000 equity shares by preferential allotment.

Provisions invoked

• s. 19
• s. 81
• s. 173

Regulations

• Reg. 4
• Reg. 7
• Reg. 3
• Reg. 4(2)
• Reg. 11(1)
• Reg. 10
• Reg. 3(4)
• Reg. 20
• Reg. 11
• Reg. 4(6)

Holding

SEBI granted exemption to Dr. Ajay Satia and persons acting in concert with him from complying with Regulation 11 of Chapter III of the Takeover Regulations in respect of the proposed acquisition of 20,00,000 equity shares of Satia Paper Mills Ltd. through preferential allotment, subject to the conditions undertaken under para 5.3 of the order.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER IN THE MATTER OF PROPOSED ACQUISITION OF SATIA PAPER MILLS

APPLICANTS DR. AJAY SATIA, PROMOTER OF SATIA PAPER MILLS LTD., THE TARGET COMPANY AND PACs WTMO/02/CFD/06/2005 1.0 BACKGROUND 1.1 Satia Paper Mills Ltd. (hereinafter referred to as ‘the target company’) is a public limited company incorporated under the Companies Act, 1956, having its registered office at Malout-Muktsar Road, Village Rupana, Distt- Muktsar, Punjab. 1.2 The equity shares of the target company are listed on the Ludhiana Stock Exchange and Delhi Stock Exchange. 2.0 APPLICATION FOR EXEMPTION 2.1 Dr. Ajay Satia who is a promoter of the target company along with persons acting in concert with him (hereinafter referred to as ‘acquirer’) made an application through the target company vide its letter dated 4.8.04 under Regulation 4(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (hereinafter referred to as ‘the Takeover Regulations’), seeking exemption from the compliance of Regulations 10, 11 and 12 of Chapter III of Takeover Regulations with respect to the proposed acquisition of 22,50,000 equity shares of the target company by the acquirer through preferential allotment. 3.0

3.2 The target company is engaged in the manufacture of writing and printing papers and the Government of India in accordance with the direction of the Hon’ble Supreme Court has put an obligation on the paper industry to follow time frame action for meeting the pollution control norms and as per the required norms the target company is to install the Chemicals Recovery and Power Generation Plant so that it could be able to meet the pollution control norms. 3.3 The target company has approached the Financial Institutions for debt financing of the proposed project of installing the Chemicals Recovery and Power Generation Plant because of unfavorable market conditions for public issue. The paper industry is also passing through a recessionary market condition and the unsatisfactory financial performance of the target company during the last few years is also a reason for choosing debt financing of the proposed project. 3.4 The Corporate Debt Restructuring Cell while granting approval for the restructuring of the existing debts vide letter dated July 9, 2003 has imposed a condition that the promoters shall bring Rupees 225 Lakhs by way of equity induction and also arrange for the shortfall of funds required for the proposed Chemicals Recovery and Power Generation Plant estimated at Rupees 75 Lakhs by the management, which would be raised later against issue of shares worth Rupees 75 Lakhs. 4.0 RECOMMENDATION OF THE TAKEOVER PANEL The aforesaid application dated 4.8.04 was forward

Source: SecMarx — sebi:WTMO/02/CFD/06/2005. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.